Cost of Cheapest Car I Could Find

I bought a used Honda Fit a few months ago. It's basically a project to see what the lowest Total Cost of Ownership car is like. The car was about $8000 from an office park used car dealer. Those guys go to auctions, pick up cheap cars, clean them up and sell them on. The used car market was still a little pricey when I bought the car compared to now; I think now the used car market resembles the "normal" historical scenario. I think I could probably buy the car now for more like $5000-6000, but things might go completely nuts again if interest rates start coming down again.

Now after a few months, I know the cost to operate the car. It gets good gas mileage--about 32 mpg. I have a fancy insurance policy, but the car is pretty cheap to insure (compared to a $50,000 car). Between the gas and insurance it costs about $130/month to drive about 400 miles. Currently, you can make about $130/month in interest on a savings account with ~$35,000 on deposit (at 4.35% interest).

I did spend a chunk of time repairing some rust damage. That took maybe 8 hours. It wasn't totally necessary, and is sort of a hobby/learning experience, so it wasn't too bad. Still, I would have rather done something else. Otherwise the car has been reliable.

I don't really know the TCO because I have no way to really estimate the current value of the car, nor its potential future sale price. If I keep the car for 2 years and drive 400 miles per month, and the car ends up being worth $5000 by then the TCO is a pretty surprising $7,700 over 24 months (~$320/month). Most of that is depreciation, then gas and insurance.

Think about that for a while: a modest, kind of old used compact car costs $320 a month to own and operate. My household is in the top 5-10% income households in the USA. When I just look at cars going by on my road, or look at cars in the parking lot at the grocery store, almost everyone, including grocery store employees, is driving a more expensive car. It does not add up.